CH. Karnchang

CH. Karnchang Plc (CK)
CK’s poor earnings visibility due mainly to weak margins and a high interest burden needs to be addressed before it can become a sound
infrastructure play. Bagging a new contract is unlikely to drive its share price by much. Given its weak balance sheet, we believe CK will face
chronic profitability problems. Furthermore, current market risk aversion does not bode well for its share price.
We keep our forecasts, our Underperform call and target price, still based on 1.8x CY12 P/BV, its five-year historical average.